Tips on Filing Your Own Taxes

Technology has changed the rule book on doing taxes. Judging by its Web site, even the U.S. government seems to want you to use electronic forms for filing, and with good reason: Opting for the electronic route can take a lot of confusion and headaches out of determining write-offs and math equations. Filing by paper is still the least expensive way, but whichever you choose, filing on your own is not only feasible, it might even be optimal.

There are few costs for filing your own taxes--for instance, you won't have to pay an accountant, CPA or storefront tax preparer to do your taxes for you. Many financial advisers believe the most important reason to file your own taxes is to have more control over your financial destiny, be better informed about what to keep as receipts next year and to better understand your tax situation. You may want to consult your own financial advisor to determine whether doing your own taxes may be worthwhile, or if you have special considerations to take into account.

Paper Filing

Paper filing is more economical--all you pay for is postage. Refunds, though, take longer because the IRS "retypes" paper forms into its system while electronically filed returns go directly into its system. Math-challenged people may find it a drawback to do their own calculations, although if you're filing an E-Z form it shouldn't be too difficult.

Electronic Filing

Electronic filing requires using a software program which, depending on the tax forms you are using, can be expensive. The IRS offers free tax software but states often charge a nominal fee to use their software. Generally the more sophisticated your filing, the more expensive the software.

Getting Started

Before you actually start your taxes, you should first go through your records for the year and pull together all the documents you'll need to complete your taxes. You can find a list of documents you need at the IRS Web site. Gather those as well as any receipts associated with your tax situation.

Itemize or Take the Standard Deduction

People usually itemize when the standard deduction is less than the amount paid out by a person (paying for health care is one example). But itemizing is important for other parts of your income tax if you've done home improvements, if anyone in your home has paid for education, if you've had a side business or hobby that earned you some extra money, or if you've rented out an apartment.

Where to Look for Additional Deductions

Uncle Sam is giving tax breaks to people who have made their homes more energy efficient due to home improvements. If you've put in new windows, updated your water heater or bought a new boiler, you may get a tax break. Just make sure you have the receipts for all those costs.

Education

If you, your spouse or child has taken a course or gone to school, there are two education tax credits to choose from. Keep receipts of books and preparatory materials you bought for these classes because those can be itemized.

Dependent Care

If you've cared for a parent or relative over the year, there could be additional tax relief for you. Keep track of your expenditures, including things like medication costs, extra utility usage, transportation, hospital bills, etc.

Charitable Donations

Try to make it a practice to get receipts for any donations you make whether it's clothes, books, cars or other items. Big-name charities provide receipts for all donations they receive. If you've put $10 in your church plate every week, that qualifies as a donation. However, the IRS will ask to see a receipt for donation claims that are over a certain amount. Check with the IRS for the exact figure.

There's a lot involved in filing your own income taxes, but the results may be worth all the reading and research in order to earn the biggest refund you're entitled to.

SunTrust is unable to offer tax or legal advice. Please consult with your tax and legal advisors.